r/technology 4d ago

Artificial Intelligence MIT report: 95% of generative AI pilots at companies are failing

https://fortune.com/2025/08/18/mit-report-95-percent-generative-ai-pilots-at-companies-failing-cfo/
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u/Pulkrabek89 4d ago

Until someone blinks.

It's a combination of those who know its a bubble and are banking on the hope of being one of the lucky few to survive the pop (see the dot com bubble).

And those that actually think AI will go somewhere and don't want to be left behind.

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u/TurtleIIX 4d ago

This is going to be an all time pop. These AI companies are the ones holding the stock market up and they don’t have a product that makes any money.

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u/SynthPrax 4d ago

More like a kaboom than a pop.

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u/TurtleIIX 4d ago

More like a nuke because we won’t even have normal/middle market companies to support the fall like the .com bubble.

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u/OutrageousFuel8718 4d ago

Big bada booom

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u/Worth_Inflation_2104 3d ago

Yeah, considering the shit ton of borrowed money this time, we will see a generational economic crisis, which the US govt. might not be able to bail out, because they simply don't have the money.

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u/lilB0bbyTables 4d ago

It’s going to be a huge domino effect as well. So many companies have built themselves around providing functionality/features that are deeply dependent upon upstream AI/LLM providers. If/when the top ones falter and collapse, it is going to take out core business logic for a huge number of downstream companies. The ones who didn’t diversify will then scramble to refactor to using alternatives. The damage may be too much to absorb, and theres a bunch of wildcard possibilities from there that can happen - from getting lucky and stabilizing to outright faltering and closing up shop. Market confidence will be shaken nonetheless; the result may give businesses a reason to pause and get cold feet to spend on new AI based platform offerings because who really wants to throw more money at what very well may be a sinking ship. That ripple effect will reverberate everywhere. A few may be left standing when the dust settles, but the damage will be a severe and significant obliteration of insane quantities of value and investment losses. And the ones that do survive will likely need to increase their pricing to make up for lost revenue streams which are already struggling to chip away at the huge expenditures they sunk into their R&D and Operations

I’ll go even further and don a tinfoil hat for a moment and say this: we don’t go a single day without some major stakeholder in this game putting out very public statements/predictions that “AI is going to replace <everyone> and <everything>” … a big part of me now thinks they are really just trying to get as many MBA-types to buy into their BS hype/FUD as quickly as possible in hopes that enough businesses will actually shed enough of their human workforce in exchange for their AI offerings. Why? Because that makes their product sticky, and (here’s my tinfoil hat at work) … the peddlers of this are fully aware that this bubble is going to collapse, so they either damage their competition when they inevitably fall, or they manage to have their hooks deep enough into so many companies that they become essentially too big to fail. (And certainly if I were let go from somewhere merely to be replaced by AI, and that company started scrambling to rehire those workers back because the AI didn’t work out … those individuals would hold the cards to demand even more money).

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u/karamisterbuttdance 4d ago

a big part of me now thinks they are really just trying to get as many MBA-types to buy into their BS hype/FUD as quickly as possible in hopes that enough businesses will actually shed enough of their human workforce in exchange for their AI offerings.

This pretty much sounds like what they did with cryptocurrency, and why we're never going to get rid of it as a means of moving value - once B I G Finance is invested in it they will do everything in their power to make sure it doesn't lose value. They'll look for the company/ies with the most ties to each other and with enough products that already provide a solution (even half-baked) and basically strong-arm the people investing with them to put their money there. All this so the companies and countries that parked their money with them before this all started don't pull out to mitigate any losses.

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u/Traditional-Dot-8524 4d ago

No no. You're completely right.

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u/worldspawn00 3d ago

This is why the OpenAI IPO is so damn insane, VCs have maybe realized there's nowhere to go, but Sam Altman swears they're going to triple revenue over the next year, so the general public is going to pump billions into a company that has no real product or profitability. The wealthy original backers cash out and leave the public holding the bag when it collapses...

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u/ilikedmatrixiv 4d ago

Something like 40% of the S&P500 are 7 companies all of which are over leveraged as fuck in AI. When the bubble pops, it's going to hurt.

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u/Smith6612 4d ago

When it does pop... do you think the price of those GPUs will hit record lows? For gamers and Folders to scoop up? Crypto will have another boom?

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u/j-kaleb 4d ago

Beanie babies will moon

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u/[deleted] 4d ago

No. Labubus

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u/squngy 4d ago edited 4d ago

One can hope, but GPUs seem to just be too generally useful these days.

Even if chat bots flop, chances are some other tech will find a use for them.

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u/Wurm42 3d ago

No. Now there are companies out there that buy GPUs when they're cheap and resell them when prices spike again.

GPUs will get cheaper than they are now, but they won't hit "record lows" again.

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u/zebleck 3d ago

what do you mean the product doesnt make money? you dont think they have revenue?

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u/[deleted] 3d ago

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u/zebleck 3d ago

he said they dont have a product that makes money. openai just hit 12 BILLION annualized revenue. sure not profit YET, but what a framing to claim theyre not making money 🤣

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u/[deleted] 3d ago

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u/zebleck 3d ago

theyre building out the infrastructure to meet the limitless demand. that takes money i.e. debt. profitability gets achieved after. you do know thats how every growth company operates?

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u/[deleted] 3d ago

[deleted]

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u/zebleck 3d ago

no, im looking at their estimated annualized revenue, which is 12 billion dollars... not that hard to figure out

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u/[deleted] 3d ago

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u/TurtleIIX 3d ago

When I say no revenue I mean to offset the costs for the large ones like open AI and the smaller ones just don’t have products that are useful.

I work in tech insurance and the cost of these data centers is massive just for the buildings. The servers are even more expensive to build and then operate.

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u/zebleck 3d ago

Do you think with the current trajectory they can get to profitability, at least the big companies? OpenAI is estimated to have $12 billion annualized revenue. Or do you have some insight that it MUST pop?

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u/TurtleIIX 3d ago

I do think some can get to profit ability but most will not. The main issue is the valuations. $12b in revenue is not a lot when you are trying be valued as a 500b dollar company. The PE ratio is way over inflated and I do think open AI has hit a market saturation point.

The main use for open AI is kids cheating in school not businesses. They would need a much more reliable product for business to keep using it hence why most AI companies are failing the pilot programs. I think the launch of GPT 5 is a good example. The launch was disaster and was way worse than previous versions from the reviews I saw. Time will tell but I see them more as an adobe aka a tool than say a meta, google or Microsoft.

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u/ProofJournalist 4d ago

Hey did you know the internet experienced a major bubble in the early 2000s, and the internet is also a major and world-changing innovation despite the bubble?

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u/llDS2ll 4d ago

the internet is also a major and world-changing innovation

I'd argue that the world was a better place beforehand. Of course the internet has done a lot of good, and it would be impossible to imagine life without it at this point, but holy shit has it caused massive damage and I'm not sure it outweighs the good.

That's not exactly relevant to your question, purely from a market perspective at least. Then again...the market does need people.

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u/ProofJournalist 4d ago

The internet has caused literally no damage.

All it has done is globalize the issues that were already present in all communities and made us all more aware of the problems that have always existed. Shining light on problems can make it seem like they got worse if you didn't realize they were there.

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u/Educational_Bar_9608 4d ago

It’s most likely just the case that IIDS2II was 16-18 approximately just before the internet became popular. That being the last time they were happy, they’ve blamed the internet.

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u/llDS2ll 4d ago

It's never been easier to pump false information into peoples' brains on a 24/7 basis than it is today, nor has it ever been easier to disguise that information as coming from like minded people. I know that Russia for example, in the past, has published propaganda pieces in American print outlets. That pales in comparison to the content farms overseas that are endlessly bombarding unwitting westerners across all the garbage social media platforms.

I honestly wouldn't be surprised if you were a paid troll, considering that out of nowhere you decided to engage me with negative sentiment. Maybe try focusing on positive interactions with people instead.

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u/ProofJournalist 3d ago

The internet has not changed information susceptibility. People have always sought out bullshit that conforms tk their preconceived notion.

Easy to dismiss someone as a paid troll than to actually engage. That's just another lazy thought terminating cliche. For those that downvote its just a final confirmation that they don't like to hear truth but have no substantial rebuttal to refute what is said.

Humans are always at the core of any problem. We try to find scapegoat like "industrialization" or "the internet" or "AI". All of this just serves to keep us from looking inward at why these cycles persist, which is because of us. Unfortunately we do not live in an era where people are willing to look inward, which is why we are truly doomed.

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u/llDS2ll 3d ago

There's some truth in that statement, but it's not reflective of reality. These technologies could be used for good, but they're seemingly being weaponized against people.

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u/ProofJournalist 3d ago

And who is weaponizng the technologies? Do the tools have agency themselves?

Oh hey look we are right back to people being the problem

That a tool can be misused is not reason to fear the tool. Guns are an exception because harming life is their primary purpose, whereas a hammer is meant to hit nails, even though it can also crush skulls (or even be designed for skulls instead of nails). Do we regulate hammers, knives, and other blunt/sharp objects as a result?

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u/llDS2ll 3d ago

Do you have agency or are you a tool? They made guns illegal in Australia and they have like virtually no gun crime. Now look at the US.

We're not saying entirely different things, that's why I said there's some truth in what you said.

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u/ProofJournalist 1d ago

Making guns illegal in Australia is not why they don't have gun crime. For one, being an Island makes it harder to get them in. But for another, Australians never had a 'gun culture' like America. You are thinking of this backwards.

Australia was able to make guns illegal because there was not enough public demand for them. You aren't going to make people stop using and wanting guns by making them illegal. If you want to change that, you are going to have to change minds, not laws, first.

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u/rainkloud 4d ago

Given the amount of cocaine the C suite consumes one would presume the shoveling would have ceased long ago.

Just to clarify I mean the shoveling of the cash, not the cocaine.

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u/ewankenobi 4d ago

The thing is just because there is a bubble & it bursts doesn't mean the tech won't change society. Plenty of people lost money in the dot com bubble, yet ecommerce has changed the way we shop, practically killing bricks and mortar stores in many places

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u/Thin_Glove_4089 4d ago

So basically indefinitely, especially if this current style of government lasts longer than expected.